Sunday, November 20, 2011

New Labor Agreement has minimum salaries at $480,000

As I mentioned yesterday, Baseball's new labor contract will include blood testing for human growth hormone..

Also there will be a rise in the minimum salary to $480,000 and luxury taxes on both amateur draft signings and international free agents coming to the major leagues.

Lawyers for players and owners are working to complete a memorandum of understanding on changes to sport's collective bargaining agreement and hope to sign the deal by Tuesday.

A person familiar with the negotiations disclosed some of the agreed-upon provisions to The Associated Press on Saturday, speaking on condition of anonymity because the deal had not yet been announced.

The blood testing provision was first reported by The New York Times.

Blood testing for human growth hormone will start when players report to spring training in February, putting MLB ahead of the NFL. The NFL wanted to start HGH testing this season, following that sport's new labor contract, but the NFL Players Association has not agreed, causing some congressmen to pressure the union.

There also will be a slight increase in the total of players eligible for salary arbitration after the 2012 season, when there also will be a new method to determine compensation for clubs losing top major league free agents. There also will be modifications to the luxury tax on high-payroll teams, but the threshold will remain at $178 million next year.

The changes are the most numerous since the 1997 agreement that came nearly two years after a 7½-month strike that wiped out the 1994 World Series. The five-year deal, replacing one set to expire Dec. 11, ensures 21 consecutive years of labor peace for MLB at a time when the NBA season is being threatened by a lockout that already has wiped out a quarter of the regular season.

As part of the deal, baseball's minimum salary will go from $414,000 this year to $480,000 in 2012 and $500,000 later in the deal -- matching what the average salary was in 1989.

Owners gained one of their chief objectives: a restraint on the bonuses paid to amateur free agents, both those entering professional baseball from high schools and colleges and those coming to MLB organizations from abroad.

A tax of 75 percent to 100 percent will be imposed on the amount a team exceeds a threshold, and teams exceeding the threshold by higher amounts could lose first- and second-round draft picks.

For international free agents, such as players from the Dominican Republic and Venezuela, there will be a separate threshold and tax with penalties, and there will be a study committee that could put a new system in place later during the agreement.

After the 2012 season, about five to six additional major leaguers will become eligible for salary arbitration each year. The group of players with at least two but less than three years of major league service lost the right to arbitration in the 1985 agreement, but players regained it for the top 17 percent of 2-3-year players by service time in the 1990 deal. That will rise to 22 percent following the 2012 season.

For this offseason, the number of Type A free agents, requiring the highest draft-pick compensation from the team signing a player, will be cut from 21 as part of a one-year deal bridging the way to a new system. There will be no change for the most-prized free agents, since as Albert Pujols and Prince Fielder.

Starting next year, teams will have to make a "qualifying offer" of a one-year guaranteed contract to their players eligible to become free agents in order to receive compensation if the player signs with another club. That amount will be at least $12.4 million and could rise by next year, depending on a formula. The new "qualifying offer" does away with the statistical formula for ranking free agents that has existed since the 1981 strike settlement.

In addition, there are modifications to baseball's revenue-sharing formula and to its benefit plan. Players and owners did not agree to a tax on low-payroll teams, although they did have some discussion during negotiations.